Boockvar: Where Is Everybody?
The following is from Peter Boockvar:
I wish this party had more people
I wish there were more people invited to this party. The excitement around the AI trade and now the potential of agents being our personal assistant I get but it comes with apathy towards most everything else. I say this because yesterday just 46% of the stocks that trade on the NYSE closed above its 200 day moving average. That was down from Friday, lower from about 64% one month ago and the least since March.
Also, I saw this tweet from the very good data miner Jason Goepfert:
In addition to owning some AI stocks, as a holder of many stocks that aren’t, I certainly hope that the laggards catch up rather than the leaders catch down.
% of NYSE Stocks trading above its 200 day moving average
I mentioned yesterday the price increase that Old Dominion Freight announced. Also out yesterday were price increase announcements on different acetyl chemicals by Celanese of about 4.5%. This chemical ends up in clothing, skincare/cosmetics, pharma products, paints, glues, lumber to name a bunch.
This gets to my point again that wholesale inflation is throughout the supply chain but pricing power of the business that sells direct to the consumer is the determining factor as to the flow thru to consumer prices.
Ahead of the Trump/Xi gathering, I’ll just say this. I think it’s a good thing that the two largest economies get along and unhindered trade takes place between our two nations as we both need each other. That said, we know China has been doing its best to rely less on the US ever since Tariff War 1.0 was launched against them in 2018. The US as we know has only now realized it needs to rely less on China, particularly with rare earth magnets and other key things like pharma ingredients.
Further evidence today of China’s growing presence on the global tech stage, “Alibaba Group Holding has introduced what it called China’s most powerful artificial intelligence chip and teased plans to train an AI model with up to 10 trillion parameters, as top executives reaffirmed the tech giant’s ambition to pursue artificial superintelligence (ASI)” said the South China Morning Post today.
We’ve seen a global manufacturing recovery take place this year after about 3 years of contraction and that was further confirmed today by the nice lift in the UK CBI Industrial Orders index for September which rose to -9 from -25. The estimate was for weakness to -35.
CBI said “There are growing signs that conditions are stabilizing for manufacturers, with a marked improvement in order books for the 2nd consecutive month – taking them to their strongest in more than three years. Output is also now falling only marginally and selling price expectations have eased considerably from the highs seen following the outbreak of conflict in the Middle East.”
That said, “While these are encouraging signs, it is still too early to call this a sustained recovery, with manufacturers continuing to face high supply chain, energy and employment costs.”
CBI Industrial Orders Index
